Mobile money transactions are vulnerable to various forms of fraud. Existing approaches for carrying out mobile money transactions include, for example, a Telco-centric model, wherein a customer can pay for various utility bills. In such an approach, money is loaded physically by a customer visiting a Telco outlet, and the mobile components are maintained by Telco. Another existing approach includes a bank-centric model, wherein a customer can pay for various utilities. In such an approach, money is loaded physically by a customer visiting a bank branch, and accounts are maintained by banks.
As noted, however, existing approaches are vulnerable to various mechanisms for fraud. For example, money laundering is the practice of disguising the origins of illegally-obtained money, and can often include stages of placement, layering, and integration (PLI). Placement (P) refers to introducing the money into a financial system by some means (for example, remittance center in m-transfer). Layering (L) refers to carrying out financial transactions in a complex manner in order to camouflage the source of the money. Integration (I) refers to acquiring wealth generated from this process (for example, pick up the money from licensed center or use the credit against some services/product purchase).
Additional mechanisms for fraud can include transaction interception or inappropriate entry into a mobile financial service provider (MFSP) system, an agent and/or customer defrauding the MFSP system (an agent can sign as a fictitious customer, an agent can divide a single deposit into multiple small deposits, etc.), an agent defrauding customers (charging the customers excessive rates, faking a cash-in transaction, stealing customer money, etc.), an outside party defrauding a customer (for example, a customer's personal identification number (PIN), account number, and/or phone is stolen by a third party), and privacy violations occurring in connection with customers' confidential information.
Accordingly, a need exists for detecting and preventing fraudulent mobile money transactions.